Qualify for a VA Loan

If you served in the military on active duty or in the Reserves, or if you are a surviving spouse of a veteran who lost their lives in the service of our country, you can qualify for a NO MONEY DOWN, NO PRIVATE MORTGAGE INSURANCE loan backed by the U.S. Department of Veterans Affairs.

Qualifying for a VA mortgage loan involves meeting specific service, credit, and property requirements.  Here’s what you need to know to qualify:

1. Meet Service Requirements

• • • Active Duty Service Members: Typically, you must have served at least 90 consecutive days of active duty during wartime, or 181 days during peacetime.
    • Veterans: If you served in the military and were discharged under conditions other than dishonorable, you may be eligible. You should have completed at least 90 days of active wartime service or 181 days during peacetime.
    • National Guard and Reserves: You must have completed at least six years of service or at least 90 days of active service, with at least 30 consecutive days under Title 32.
    • Surviving Spouses: The unremarried spouse of a veteran who died in service or due to a service-connected disability may also qualify.
      

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2. Obtain a Certificate of Eligibility (COE)

• • • What is a COE? A Certificate of Eligibility confirms to lenders that you meet the service requirements for a VA loan.
    • How to Get a COE: You can apply for a COE through:
      • The VA’s eBenefits Portal (online application)
      • Your Lender, who can help you obtain it electronically
      • Mail, by completing VA Form 26-1880 and sending it to the VA
      • Documents Needed: You may need a copy of your discharge papers (DD-214) or other service documentation to apply.
        

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3. Meet Credit and Income Requirements

• • • Credit Score: Although the VA does not set a minimum credit score, most lenders require a score of at least 620. However, some lenders may approve borrowers with lower scores, depending on other financial factors.
    • Stable Income: You need to demonstrate steady income to support mortgage payments, other debts, and living expenses. Lenders will evaluate your employment history and income stability.
    • Debt-to-Income Ratio (DTI): The VA recommends a DTI ratio of 41% or lower, but some lenders allow higher ratios if you have other compensating factors, such as significant savings.
      

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4. Satisfy VA Loan Property Requirements

• • • Primary Residence: The VA loan program is for purchasing or refinancing a primary residence, not vacation homes or investment properties.
    • VA Appraisal: The property must undergo a VA appraisal to confirm it meets the VA’s Minimum Property Requirements (MPRs) for safety, soundness, and sanitation.
    • Occupancy Requirement: You must intend to occupy the home as your primary residence, typically within 60 days of closing.
      

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5. VA Funding Fee

• • • What is the VA Funding Fee? The funding fee helps offset the cost of the VA loan program and reduces the burden on taxpayers.
    • Fee Amount: It ranges from 1.25% to 3.3% of the loan amount, depending on factors such as the type of loan, down payment, and whether it’s your first or subsequent use of the VA loan benefit.
    • Exemptions: Veterans receiving VA disability compensation for a service-connected disability are usually exempt from the funding fee.
      

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6. Additional Considerations

• • • Restoration of Entitlement: If you’ve used your VA loan benefits before, you may need to restore your entitlement to qualify for another VA loan. This can be done if you’ve paid off the previous loan or sold the property.
    • Spousal Co-Borrowers: If you’re married, your spouse can be a co-borrower. Non-married partners who are not veterans cannot use the VA loan benefit.
      

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7. Pre-Approval Process

• • • Get Pre-Approved: Before searching for a home, seek pre-approval from a lender to understand your borrowing capacity and show sellers that you’re a serious buyer.
    • Provide Documentation: You’ll need to submit documents such as pay stubs, tax returns, and bank statements to the lender.
      

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By meeting these requirements and following the steps, you can qualify for a VA mortgage loan and take advantage of its benefits, including no down payment, competitive interest rates, and no private mortgage insurance (PMI).